Oil prices jump on expectation that producers will agree output freeze

By Henning Gloystein
SINGAPORE, April 6 (Reuters) - Oil prices rose in early
Asian trading on Wednesday, supported by rising expectations
that exporters will agree on freezing their output amid global
oversupply.
The Kuwaiti governor for the Organization of the Petroleum
Exporting Countries (OPEC), Nawal Al-Fuzaia, said on Tuesday
that there were "positive indications an agreement will be
reached" during a producer meeting scheduled for April 17 in
Qatar.
Front month U.S. West Texas Intermediate (WTI) crude futures
CLc1 were trading at $36.74 per barrel at 0030 GMT, up 2.3
percent, or 85 cents, from their last settlement.
International Brent futures LCOc1 were up 1.7 percent at
$38.50 a barrel.
"Oil gained some momentum. The comment by the Kuwait OPEC
governor provided some support to prices," ANZ bank said on
Wednesday, but warned that investors would likely remain
cautious ahead of the April 17 meeting.
A preliminary producer agenda, seen by Reuters, that has
been sent to invited nations by the meeting's host Qatar
indicated expectations for a short gathering lasting 4 hours,
including just 30 minutes slated for a debate on approving the
deal.
An initial output freeze agreed in February has helped oil
prices rise to almost $38 a barrel from a 12-year low close to
$27 in January.
Still, prices have fallen in recent days on doubts that a
wider deal will be reached, largely because Iran has so far said
it has no intention of slowing its production after crippling
sanctions against it were lifted in January.
A freezing of production at current high levels would also
do little to address a global supply overhang that sees at least
a million barrels of crude produced every day in excess of
demand.
Meanwhile, traders said that a weakening dollar was also
supporting oil as it makes dollar-traded fuel imports for
countries using other currencies cheaper. The greenback has
fallen 5 percent since January against a basket of other leading
currencies .DXY .
Dutch bank ING said that technical market indicators implied
that oil prices had developed a bottom near recent lows but that
the "short-term upside is limited".